Bitcoins

grey_gym_sock

AIUI, early adopters (including the founders) could have profited from mining bitcoins earlier on, when it was easier to do so. by design, mining becomes harder over time, and eventually stops.

the motivations of the founders aren't that important, though. because they don't control it. nobody does.

i'm not sure why some ppl think it's significant that bitcoins might end up being subdivided into smaller fractions for practical use. that isn't QE. it wouldn't devalue the bitcoin in any way. it would just be a practical necessity if bitcoins become more valuable.

pineapple

Max Keiser on RT keeps pushing the idea of bitcoins. :huh:

andy.m_2

my postr, managed to circumvent controls, it's back.

By all accounts there are many saying it's a fake hack and they are publishing a hash of the (confirmed as true) 2011 list.

Certainly my name and details aren't on there and the vast majority are yahoo.com

merlingrey

grey_gym_sock wrote: »

i'm not sure why some ppl think it's significant that bitcoins might end up being subdivided into smaller fractions for practical use. that isn't QE. it wouldn't devalue the bitcoin in any way. it would just be a practical necessity if bitcoins become more valuable.

That's the same as when a company does share splits, like a company might have 11 million shares in issue but when the shares get too expensive per unit they sometimes split the shares, the effect is the price gets diluted down but the capital base remains the same and everyone has more units at the lower price.

People are thinking of that but thinking the number of units each person has would remain the same and they obviously would not, if the split is 10:1 then there would be 110 million units, if you had 1 unit before then you'll now have 10.


The thing i want to know though is why only 21 million in the first place? why have it that illiquid the smaller the size the more liquidity risk there is, if you want a global new form of currency it would have to be at least 1 per human on the planet or about 7 billion.

JohnRo

Why not do a little reading about what bitcoin really is?

Breaking an incorruptible decentralised crypto currency into it's smaller parts doesn't devalue it in any way whatsoever. Any more than a 10p piece devalues the pound, or the scrap value of ten 100g bars of gold are worth more or less than a 1KG bar.

A 2 for 1 share split is a centrally controlled manipulation which halves the value of the currency unit (initially) by inflating the monetary units two fold. The analogy is a complete red herring.

Bitcoin cannot be corrupted in that way or any other, it will eventually find its own value in a free market or more likely get outlawed by the monopoly money Barons.

thelawnet

pineapple wrote: »

Max Keiser on RT keeps pushing the idea of bitcoins. :huh:

Well duh. He holds many, and wishes to profit at others expense aka pump and dump.

Ark_Welder

grey_gym_sock wrote: »

i'm not sure why some ppl think it's significant that bitcoins might end up being subdivided into smaller fractions for practical use. that isn't QE. it wouldn't devalue the bitcoin in any way. it would just be a practical necessity if bitcoins become more valuable.

Nothing to do with QE. Imagine the shops showing prices of 0.0000001 Glance at that quickly without counting the zeroes.

A currency that does not increase the amount in issue is progressively deflationary. If someone wants to buy non-essential items but has an expectation that those items will be cheaper in the future, then there is an incentive for them to wait until those goods are cheaper, or until a purchase finally becomes essential. Magnify that approach over a whole population and you see the problems that Japan has had for the last twenty years with deflation.

The Bitcoin approach also accepts that lost currency will not be replaced, therefore enhancing the value of the remaining currency. So Bitcoin won't remain static, it will diminish over time after the maximum issue is attained. Therefore, making this electronic tag 'rarer' and so more 'desirable'. That is an incentive to actively seek out and destroy others' wallets. And with fewer bits available for general circulation they will tend to progressively concentrate in the hands of fewer and fewer individuals at the production end of the economy, and away from the consumer. So a return to a kind of social order that is a pre-industrialisation, feudalist serfdom.

Unless, you do the following.....

People are thinking of that but thinking the number of units each person has would remain the same and they obviously would not, if the split is 10:1 then there would be 110 million units, if you had 1 unit before then you'll now have 10.

...which is increasing the amount of currency in circulation, a process that has an inflationary effect, a process that devalues the currency. Just like the existing GBP/USD in your pocket. Not what is supposed to happen with Bitcoin.

+++

thelawnet has it right. Those that put money in with the knowledge that it is, basically, an online game that rewards puzzle solving with tokens, then good luck to them. Not something that turns me on, but I accept we're not all the same. Those that think its the future of civilisation, then I'd just say, Eloi and Morlocks.

JohnRo

Ark_Welder wrote: »

Those that think its the future of civilisation

I don't think many are, me included, but speculators aside, one of the main reasons it's gaining traction is because the current system run by robber barons is unsustainable.

Money is a bit like religion, you have to have belief and faith.

Ark_Welder

Further, thinking that Bitcoin cannot be corrupted or controlled is a fallacy. The recent 12-hour outage demonstrates this quite clearly.

N1AK

Ark_Welder wrote: »

Think of it another way: think of Bitcoin as your currency of choice.

Using the figures from cepheus' post, buying a cup of coffee at the end of the 6 hours would have been 204% more expensive that buying at the start. That is an annualised rate of inflation of 297,840%.

Except a BTC was worth considerably less than it is now a year ago. We've just seen a massive value increase followed by a correction that took it back about halfway to where it had been before.

I don't have any bitcoins. I won't be getting any bitcoins any time soon but that's because I have no faith in the currencies ability to maintain value long term, especially as it becomes more widely known.